MDI Entertainment, Inc.

Financial Main Page | IGHRM Main Page
Disclaimer:

International Guild of Hospitality & Restaurant Managers

MDI Entertainment, Inc. (OTC BB:LTRY.OB)

201 Ann Street, Suite 210
Hartford, CT 06103

Phone: (860) 527-5359
Fax: (860) 527-5920
Email: webmaster@mediadropin.com
Employees (last reported count): 22

MDI Entertainment, Inc. specializes in creating, marketing and implementing entertainment-based promotions to North American lotteries. The Company's principal business has been the scratch ticket segment of the government lottery industry, although it has run on-line entertainment-based promotions with lotto and daily numbers type games featuring its licensed HARLEY-DAVIDSON logo. The lottery promotions feature well-known brand names and entertainment properties licensed to the Company and designed to attract new lottery players while providing a new experience for existing lottery players. The Company's current promotions feature a wide variety of such brand names and entertainment properties including, among others, Wheel of Fortune, Jeopardy!, Harley-Davidson, Betty Boop, Louisville Slugger, Country Music Television/CMT, Heroes of Space, The Pink Panther, Dale Earnhardt, Jr. and Jeff Burton. The Company also offers a full range of services, including ticket and point of sale design, prize structure development, promotional event planning, market research, fulfillment services, customer service support and second chance drawing assistance.

The scratch tickets feature the licensed properties, usually displaying a scene and/or logo from the entertainment-based and brand name properties. Prizes awarded in such promotions typically include a number of "second chance" prizes related to the licensed property, including collectible logo bearing merchandise such as HARLEY-DAVIDSON T-shirts and caps, and other related merchandise such as posters, money clips, telephones and, in the case of HARLEY-DAVIDSON, HARLEY-DAVIDSON Sportster motorcycles. The Company currently derives most of its revenues from the sales of such merchandise to the lotteries.

On February 26, 2002 , the Company announced that it had executed a Letter of Intent to be acquired by Scientific Games Corporation. Under the terms of the agreement MDI will become a wholly owned subsidiary of Scientific Games but will still operate as an autonomous business unit and will continue to offer its products and services to all lotteries.

The Company has secured rights to, and targeted specific properties for, instant lottery theme games and promotions that have broad appeal and significant brand loyalty, and that enable the Company to market collectible logo bearing merchandise tied directly to the property or brand. The properties are specifically selected because they possess a substantial following that can aid a lottery in attracting new players, while at the same time providing a different experience for many existing players. Currently, the Company has licensing agreements with 27 companies for 33 licenses. Licenses generally are held between two and three years.

The Company's contracts with the lotteries provide for services that are tailored to the preferences of the lotteries and include ticket and point of sale design, prize structure development, promotional event planning, market research, customer service support, second chance drawing assistance and fulfillment services. The lottery contracts generally provide the Company with two sources of revenue, which consist of license and royalty fees for the use of the entertainment properties and mark-up on the sale and fulfillment of collectible and logo bearing merchandise. The Company has had contracts with over 90% of all North American lotteries, and currently has over 50 promotions that are in progress or scheduled for introduction during calendar 2002 with 32 lotteries.

MDI derives 90% of its revenues from the sale to the lotteries of logo bearing merchandise (such as T-shirts, posters, hats, playing cards, telephones, film cells, stadium blankets, carryall bags, money clips, jackets, electronic games, watches, clocks, motorcycles and credit cards with prepaid credit) used as second chance prizes. The Company typically orders such merchandise directly from the licensor or its authorized representatives at wholesale rates, thereby generating additional income for the licensor either from direct sales or royalty income. Typically, the Company relies on third parties for data entry and verification of the names and addresses on winning tickets, and work with a third party fulfillment house to deliver prizes to winning lottery players. Inventory of prizes is typically held and shipped to prizewinners by the fulfillment house.

The Company competes with Telecom Productions, Inc., Promo-Travel and Oberthur Gaming Technology.

Disclaimer:
The data included within the Financial section is solely for information and does not construe a recommendation and/or endorsement by IGHRM or its members to invest funds with any of the companies listed. You are strongly advised to obtain professional advice with qualified individuals or corporations for any investments of funds.

IGHRM Main Page